Nandaway Pty Ltd & Anor v Juice Station Australasia Pty Ltd & Ors

[2006] NSWSC 1461

CITATION:	Nandaway Pty Ltd & Anor v Juice Station Australasia Pty Ltd & Ors [2006] NSWSC 1461
HEARING DATE(S):	18 December 2006
JURISDICTION:	Equity Division
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	12/18/2006
DECISION:	Injunction granted
CATCHWORDS:	INJUNCTIONS – interlocutory mandatory injunction – for delivery up of shop fitout – where strongly arguable case for final relief – where undertakings proffered which would preserve ultimate rights of competing claimant if established.
PARTIES:	Nandaway Pty Ltd (first plaintiff) Eleftherios Konidaris (second plaintiff) Juice Station Australasia Pty Ltd (first defendant) Juice Station Franchising Pty Ltd (second defendant) Juice Station Properties Pty Ltd (third defendant) Juice Station Holdings Pty Ltd (fourth defendant) Juice Station Logistics Pty Ltd (fifth defendant) The Juice Station Pty Ltd (sixth defendant) Parliv Pty Ltd (seventh defendant) PT Limited (eighth defendant) Mr Scott Pascoe, Liquidator (applicant)
FILE NUMBER(S):	SC 6324/06
COUNSEL:	Dr Gelbart (plaintiffs) Mr Gye (first defendant) Ms Bojanac (sol) (seventh & eighth defendants) Mr Russell (applicant)
SOLICITORS:	NOT Lawyers (plaintiffs) David Legal (first defendant) Landerer and Co (seventh & eighth defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRERETON J

Monday 18 December 2006

6324/06 Nandaway Pty Ltd & Anor v Juice Station Australasia Pty Ltd & Ors

JUDGMENT (Ex Tempore)

1 HIS HONOUR: The plaintiff Nandaway Pty Ltd is the present trustee of the C and M Papantoniou Trust and together with one Eleftherios Konidaris has until recently conducted in partnership a franchised business of a fruit juice outlet in two shops in Westfield Parramatta. The first defendant Juice Station Australasia Pty Ltd is the franchisor and apparently is now operating the outlets itself as lessee from Westfield. The second defendant Juice Station Franchising Pty Ltd, the third defendant Juice Station Properties Pty Ltd, the fourth defendant Juice Station Holdings Pty Ltd, the fifth defendant Juice Station Logistics Pty Ltd and the sixth defendant The Juice Station Pty Ltd are all companies in liquidation of which Stuart Ariff is the liquidator. Two Westfield companies are the seventh and eighth defendants.

2 In each of the shops, certain fitout has been installed at the cost of the franchisee. The franchise agreement provides that on termination of the franchise, the franchisor or one of its associated companies has an option to purchase all or any part of the fitout, which option it must exercise within seven days of termination. It is implicit that if the franchisor does not exercise that option, the fitout remains the property of the franchisee.

3 On the evidence before me, there has been no exercise of the option but the franchisee’s attempts to obtain possession of the fitout - which it wishes to install in new premises, to set up a new business - have been unsuccessful. The solicitors for the first defendant at first asserted some lien over the fitout. The seventh and eighth defendants at first asserted that they would not permit removal of the fitout without the consent of the franchisor, which was not forthcoming.

4 By summons filed on 15 December 2006, Nandaway and Mr Konidaris claimed interlocutory and final relief concerning their entitlement to the fitout. Palmer J granted leave to file the summons, returnable today. The interlocutory relief which is pressed today is an interlocutory injunction that until further order the first to sixth defendants deliver up or cause to be delivered up to the plaintiffs the fitout, and that the seventh and eighth defendants do all things within their power to permit compliance with that obligation.

5 As I have said, the evidence is that the option has not been exercised. Today, it was indicated on behalf of the first defendant that it did not oppose, though it did not consent to, that relief. Similarly, it was indicated on behalf of the seventh and eighth defendants that they do not oppose, though they do not consent to, that relief. A letter from the liquidator of the second to sixth defendants indicates that he claims no further interest in the plant and equipment, having sold the business and assigned the leases and corresponding franchise agreements of the above premises to the first defendant. There is not merely a serious, but on the evidence before me, a strongly arguable case that the franchisee is entitled to the fitout. The competing claims, if any, of those currently in possession of the premises can be disregarded in the light of the absence of opposition on their part, now, to the relief sought.

6 The plaintiffs wish to establish a new business and use the fitout in it. Use of the existing fitout will save them about $115,000. However, if they are to proceed with the opportunity which they have to lease new premises, they were required to give a commitment by last Friday, 15 December. On those bases, save for the interests of a third party to which I will come, it seems to me that the balance of convenience plainly favours the grant of the interlocutory relief sought, notwithstanding its mandatory character.

7 Nandaway is not the original trustee of the C and M Papantoniou Family Trust. Prior to 30 June 2004, JP Frozen Foods Manufacturing Pty Ltd was, and had since 23 July 2002 been, trustee of the trust. The trust was settled by deed on 23 July 2002. On 30 January 2004, JP Manufacturing was removed as trustee and replaced by JP Frozen Foods Pty Ltd. Like its predecessor JP Manufacturing, JP Frozen Foods is now in liquidation. It was removed as trustee on 17 March 2006 by a deed which appointed Nandaway trustee in its place.

8 This afternoon, JP Frozen Foods has appeared before me by counsel and sought an adjournment, on the basis that it may have some claim to the assets of the trust. It is on the basis of its right as trustee to be indemnified out of the trust assets that JP Frozen Foods wishes to assert some claim to the fitout.

9 I proceed on the basis, first, that - as is implicit in the plaintiff's case - the fitout is an asset of the trust of which Nandaway now and JP Frozen Foods previously was a trustee; and secondly, that JP Frozen Foods, now in liquidation, has at least an arguable claim to be indemnified out of the assets of the trust in respect of liabilities which it has to creditors.

10 Ultimately, it may well be that JP Frozen Foods does have some right to be indemnified out of the trust assets. I do not see how any such right is prejudiced by enabling the fitout to be removed from where it presently is, and placed back in the hands and control of the present trustee of the trust, rather than leaving it in the control of persons who have no connection with or obligation to the trust whatsoever. I am fortified in that view by the circumstance that the plaintiffs proffer not only the usual undertaking as to damages, but an additional undertaking, that, if the interlocutory orders they seek are made, they will not encumber or alienate or allow to be encumbered or alienated the fitout. In those circumstances it seems to me that any possibility of prejudice to the position of JP Frozen Foods is averted.

11 Accordingly, I decline to adjourn the hearing of the interlocutory application, moreso when the adjournment is sought by a former trustee which is not a necessary party to the proceedings.

12 Upon the plaintiffs by their counsel giving to the court the usual undertaking as to damages, and upon the plaintiffs by their counsel further undertaking to the court that they will not alienate or encumber or cause, permit or suffer to be alienated or encumbered the goods listed in Table A in the summons, I order that until further order:

1. The first to sixth defendants deliver up forthwith to the plaintiffs the goods listed in Table A in the summons ("the fitout") and which are situated at each of the premises listed in Table A in the summons ("the premises");

2. The seventh and eighth defendants do all things reasonably necessary on their part to permit the first to sixth defendants to comply with order one.

13 I order that costs of the interlocutory application be costs in the proceedings.

14 I direct that these orders be entered forthwith.

15 I stand the proceedings over to Friday 2 February 2007 at 9.30 before the Registrar.

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